Friday, January 1, 2010

Warsh on health care reform

My thought, based on a relatively casual understanding of what is in the bill, is that it is a muddle all around. There are things to like, such as the coverage mandate and the increased coverage and, if it survives, the partial reduction in the health insurance subsidy.

There are things to dislike, such as the fraudulent accounting and the absence of any serious efforts to control expenditures. The flip side of this, to some extent, is that the bill is unlikely to decrease medical innovation, at least in the short and medium run, and might even give it a boost. The bill also helps move the system away from first dollar coverage.

Missing in all the kerfuffle was an opportunity to fix the prescription drug benefit - a good potential source of financing for the increased coverage - and to improve on Medicare and Medicaid by dumping them in favor of the mandatory, regulated private coverage to be imposed on the non-poor and non-old. Also missing are efforts to increase the domestic supply of doctors and nurses and/or to move functions away from both to less expensive nurses aides and other staff whose supply is not artificially limited. That is a very simple form of cost control and would have the side benefit of reducing the flow of medical personnel from developing countries to the US.

And we can be thankful for the absence of a public option; try as I might, I cannot think why the left imagines that this is a good idea.